The UK Department for Environment, Food and Rural Affairs (DEFRA) is pushing Glasgow Financial Alliance for Net Zero (GFANZ) institutions to include nature in their net-zero pathways, Lord Zac Goldsmith announced at a parliamentary hearing on Monday.
The purpose of the event was for the House of Lords Environment and Climate Change Committee and the House of Commons Environmental Audit Committee to quiz Lord Goldsmith, who serves as minister for the Pacific and the international environment at DEFRA, and the secretary of state for DEFRA – George Eustice MP – over the UK government’s approach to the UN Convention on Biological Diversity (COP15).
After flagging the work of GFANZ, Lord Goldsmith said: “One of the things we are trying to do, and we have a number of things coming up that will hopefully help us to do it, is to get as many of those financial institutions as possible to commit that when they create their net-zero pathways … they do so in a credible manner, and this requires them to include nature. There is no credible pathway to net zero without recognising the role of nature in tackling climate change.
“If we can get more of those FIs onboard, that is obviously going to translate into significant amounts of finance flowing in the right direction.”
Launched in April 2021, GFANZ requires member organisations – which number more than 450 – to commit to achieve net zero by 2050. It serves as the umbrella organisation for the Net Zero Asset Managers Initiative, Net Zero Asset Owner Alliance and Net Zero Banking Alliance, among others.
Last week, the alliance published a slew of guidance for members. In the report, biodiversity and nature-based solutions were identified areas that require “further work to enhance a global, pan-sector approach to transition planning”.
“GFANZ is closely monitoring the many expert groups working on these issues and will consider updating its recommendations as appropriate,” the report said.
The House of Commons Environmental Audit Committee is also conducting an inquiry into the fossil fuel policies of GFANZ members.
“There is no credible pathway to net zero without recognising the role of nature in tackling climate change.”
Lord Goldsmith also flagged the work of the Taskforce on Nature-related Financial Disclosures (TNFD), which has promised to develop a framework for companies and financial institutions to assess, manage and report on their dependencies and impacts on biodiversity by September 2023.
“It’s not something that’s particularly well known,” he said. “It’s not something that rolls off the tongue and it’s not something that people are talking about, but there is a real interest in the Treasury. And it’s not uniform across the whole Treasury, but there are real pockets of interest within the Treasury and enthusiasm for trying to figure out how we can create parameters in which nature increasingly factors in the decisions that are taken.”
Earlier in the hearing, Lord Goldsmith noted that the UK was the first country to commit to mandatory reporting in line with the Task Force on Climate-Related Financial Disclosures. “I hope we will be the first country to do the same with the TNFD,” he said. “It’s not yet government policy, but I’m absolutely convinced it will be at some point soon.”
Meanwhile, the biodiversity agenda received another boost when the secretariat of the Convention on Biological Diversity confirmed today that, as reported over the weekend, COP15 will now take place in Montreal on 5-17 December. The conference was originally scheduled to take place in Kunming, China, in 2020 but has been repeatedly postponed due to the pandemic. China will retain its role as president and chair of the event.
The announcement was made as the latest round of negotiations regarding the Post-2020 Global Biodiversity Framework began in Nairobi today.
Elizabeth Maruma Mrema, executive secretary of the Convention on Biological Diversity, said: “I want to thank the government of China for their flexibility and continued commitment to advancing our path towards an ambitious post-2020 global biodiversity framework. I look forward, with the support of all parties, to successful outcomes of COP15.”
Responding to the news, Emine Isciel, head of climate at Storebrand Asset Management, told Responsible Investor: “We cannot wait any longer for global action on biodiversity. The Global Biodiversity Framework needs to ensure that all financial flows are aligned with biodiversity goals and values. We will be strongly advocating for the inclusion of this at the Convention on Biological Diversity negotiations in Nairobi this week.
“The decision to relocate COP15 to Canada later this year sparks renewed hopes of adopting a Paris agreement for nature.”
Eva Zabey, executive director at Business for Nature, noted that the announcement gives countries “a clear mandate to make real progress during this week’s negotiations in Nairobi”. Speaking to RI, she said: “We want to see a framework that sends a strong signal to business and finance to go further, faster. For example, through mandatory assessment and disclosure of their impacts and dependencies on nature and reforming all subsidies harmful to biodiversity.”